You know how a piece bread gets stale after you set it out on the counter for a day or two? The same thing can happen with a home. After you live in it for a while, you might start to realize that what you originally thought was charming is really annoying, and it’s not something that can be fixed.
Or, you realize that you need a bigger home – you’re having a baby, and the cute one-bedroom is now a prison. When it’s time to move, you’ll need both a listing and a buyer’s real estate agent.
You’re surfing around on Agent Harvest, looking for an agent. But, you (might) need two of them. One of those agents will parade you around homes, helping you choose the right floor plan, criticize other peoples’ wall color choices, and help you find a back yard where Fido can play without disturbing the neighbors.
A buyer’s agent is what he’s called. He’s also called a “selling agent,” which gets confusing once you talk to a listing agent, because they’re called “seller’s agent.” But, a buyer’s agent is the one you need to help you tour the home, get advice about the home you’re touring, and to negotiate the price on a home you like.
The buyer’s agent also performs a comparative market analysis, helps you find inspectors, lenders, and other people like lawyers so you can get a title search done on the house. He also helps with closing and other contingencies.
The buyer’s agent collects a commission on the sale, which is a few percentage points of the total selling price on the home. So, on a $100,000 home, the real estate professional might make 3 percent commission, or $3,000. Now, if he’s working with a brokerage, he typically pays half of that to the broker and keeps the rest. In this example, he makes $1,500.
Listing (Seller’s) Agent
A listing agent is someone that lists homes and helps sell them. If you’re moving out of your current place, a listing agent will try to get the best deal for you. Obviously, not everyone can get the best deal on a house, but the agent’s job is to try. Like the buyer’s agent, the seller’s agent must work in your best interest.
He will give you advice on how to price the home, including a CMA. He also helps arrange photography of the home so that it can be advertised online or in print, or both. The agent will help you find stagers, market to potential buyers, and host open houses to try to build interest in the home.
The agent will negotiate with the buyer on price, and handle any concessions (money that must be discounted for repairs on the home), while communicating with the buyer’s agent. Finally, the seller’s agent will help close the deal.
The Duel Agency
Sometimes, an agency will be both the buyer and the seller’s agent. This might initially seem ideal, because you only have to work with one real estate person, but there’s a problem. Let’s say you walk into an open house event, and there’s a real estate agent there. He represents the seller. But, he asks you if you have an agent. You say “no,” and he offers to represent you. Now, he’s representing both you and the buyer.
The problem arises when you realize that he makes more in commission if the home sells for a higher price – uh oh. Now your real estate agent is trying to serve both interests, but he can’t. Try to avoid duel agencies and go with a dedicated buyer’s agent. You’ll save yourself a lot of headache.
Phillip Waterman’s years in real estate are full of insight and experience. He enjoys writing about navigating the housing market in today’s world.